Mahaguthi is the oldest social enterprise in Nepal. It was started by the legendary social reformer Tulsi Mehar in 1923. In the early 20th century Nepal had a very rigid caste and social structure, only the high caste men were educated and literate. Mehar campaigned against this inequality and for this he was exiled by the Rana government to India. His interest in reform led him to Mahatma Gandhi and they worked together for many years. His time with Gandhi gave him an opportunity to gain insight to the liberation of the underprivileged. In a system where there are no opportunities for women to bring in money for themselves they must rely on their husbands and fathers. Without the means to improve their own lives women's situations can be very restrictive and this can be hugely problematic if there is domestic violence or abuse. Mehar and Gandhi's vision for reform was to empower women through education and income generation projects so that they can become economically self-reliant. Gandhi wrote to the Prime Minister of Nepal to ask him to let Mehar back into the country. Once back in Kathmandu in 1923 and with a donation from Gandhi, Mehar set up the spinning and weaving development project that became Mahaguthi. It was not only the first social development project in Nepal but was actually among the first ever manufacturing units in the economically closed feudal country.

Mahaguthi currently takes on 90 new women annually (most are widows or victims of domestic abuse) to train them in literacy and employable skills and school their children as well as supporting a hospital.